Guide

IRD Kilometre Rates 2025-26 (New Zealand): Tier 1 & Tier 2

Updated July 2026 · 5 min read

For the 2025-26 income year, Inland Revenue's kilometre rates for motor vehicles use a two-tier method. Tier 1 applies to the first 14,000 km of total travel in the vehicle (the business portion of it), and covers both running costs and fixed costs. Tier 2 applies to the business kilometres above 14,000 km and covers running costs only. All rates are in NZD per kilometre and are set in IRD Operational Statement OS 19/04.

The rates at a glance

The 14,000 km Tier 1 limit is the total distance travelled by the vehicle in the income year, and it is per vehicle per income year — not per person and not reset per trip.

A worked example

You drove 18,000 business kilometres in a petrol car during 2025-26. The first 14,000 km are claimed at Tier 1 and the remaining 4,000 km at Tier 2:

14,000 × $1.20 + 4,000 × $0.37 = $16,800 + $1,480 = $18,280 deductible.

You must keep a record of your business kilometres

The kilometre rate method spares you from adding up every fuel and maintenance receipt, but IRD does require you to be able to show how you worked out your business kilometres — a logbook or equivalent record of your business travel. A rough estimate does not survive a review; a dated record of actual trips does.

That record probably already exists: if you use Google Maps, your Timeline has captured every drive with GPS timestamps and distances. To turn it into evidence:

1. Export your Timeline from your phone (see our Timeline export guide).
2. Open the file in Time-mile — processed entirely in your browser, your location history never touches a server.
3. Filter to the income year and your business trips by date and activity type.
4. Export a CSV to total your business kilometres, or a PDF report as your supporting record.

Official sources

• IRD: Kilometre rates 2025-2026
• IRD: Operational Statement OS 19/04 — kilometre rates